Baroda BNP Mutual Fund
is coming out with a NFO in the form of Baroda BNP Paribas Multi Asset Fund.
Baroda BNP Paribas
Multi Asset Fund would be an open ended multi asset allocation scheme investing
in Equity, Debt & Gold ETF.
The fund would be open for subscription from November 28, 2022 to December 12, 2022.
NFO
details for Baroda BNP Multi Asset Fund
Scheme Opens |
28/11/2022 |
Scheme Closes |
12/12/2022 |
Fund Manager |
Mr. Jitendra Sriram Mr. Vikram Pamnani |
Benchmark |
Nifty 50 TRI (65), Nifty Composite Debt Index (20), Domestic Price of
Gold (15) |
Minimum Investment |
5,000 |
Fund Category |
Multi Asset Allocation |
Exit Load |
Nil if 10% of total allotted units are redeemed or switched within 12
months. If units are redeemed or switched beyond 10% limit within 12 months,
then 1% of applicable NAV. Nil if units are switched or redeemed after 12 months. |
Baroda BNP Paribas
Multi Asset Fund would be an open – ended multi asset fund investing across
varied asset classes but within the set limit.
Additional reading: Click Here to read why there is no such thing as best mutual fund schemes.
The investment
objective of the fund is to generate long term capital appreciation by
investing primarily in equity & equity related instruments, debt &
money market instruments, REITS/InVITs and Gold ETF.
There is no guarantee
that the investment objectives of the scheme would be achieved.
Baroda
BNP Multi Asset Fund Allocation
The asset allocation
for the fund would be something like this
Asset
Class |
Minimum
% |
Maximum
% |
Equity and Equity Related instruments |
65 |
80 |
Debt and money market instruments |
10 |
25 |
Gold ETFs |
10 |
25 |
Units issues by REITS and InvITs |
0 |
10 |
The above figures are
only indicative and not fixed, the fund managers have the liberty to move across
the asset classes depending upon prevailing market conditions as long as they
remain within the mandate permitted.
The fund can also
invest in REITs and InvITs if so desired.
A nfo means a new fund from a mutual fund
house which was not available earlier.
With growing acceptance of mutual funds as
a form of investment, mutual fund houses periodically introduce new fund offers
so as to complete their basket of investments available for investors.
A NFO is usually what results in the
beginning of a mutual fund scheme.
Other reasons being merger of schemes
within the same fund house or merger or acquisition of two or more fund houses,
these are rare instances though.
Additional reading: Click Here to read about the Advantages of Mutual Funds
NFO meaning
A nfo or a new fund offer is a method by
which a mutual fund scheme raises the initial investment into the fund.
The new fund offer is available for
purchase for a limited number of days only.
After which it becomes unavailable for
fresh purchase or redemption for a couple of days.
Once this time duration is complete, the
nfo no more remains a nfo and is treated like any other open ended mutual fund
scheme.
In which you can invest and redeem as and
when you please, considering it is an open ended fund and you comply with the
necessary exit load calculations.
What is a Multi
Asset Fund?
A Multi Asset fund means a mutual fund that
invests in three or more asset classes.
Not all the multi asset mutual fund schemes
were multi asset funds to begin with though.
Some were merged with other schemes after
SEBI’s recategorization exercise in 2018 while some were launched after 2018
like Motilal Oswal Multi Asset Fund and Nippon Multi Asset Fund.
How do multi asset
funds work?
Multi asset mutual funds invest a minimum
of 10% each in three or more asset classes.
10% is minimum but the fund manager can go
as further as he wants to as long as a minimum of 10% is invested in three or
more asset classes.
Assets usually invested in by Multi asset
funds include but are not limited to :
- Equity
- Debt
- International Equity
- Gold etc.
The basic idea behind a multi asset mutual
fund is to try and get the best out of each asset class with regards to both
returns as well as diversifying risks.
Different asset classes perform well at
different times and a multi asset mutual fund tries to capture each asset class
when it is doing well and reduce allocation in the asset class that is
performing poorly or the forecast for the same is poor.
You
can consider it if:
The new fund offer is a category of fund
that is not existent in your mutual fund portfolio.
If it is going to be a part of your
satellite portfolio.
If it adds a unique touch to your mutual
fund portfolio.
If you understand the functioning,
objectives and risks attached with the new fund offer.
The nfo mutual fund is aligned with your
risk profile.
You
should avoid it if:
The new fund offer is not going to add
anything of unique significance to your mutual fund portfolio.
If the nfo is going to be a part of your
core portfolio.
If the only reason you are investing is due
to FOMO (Fear of missing out).
If you do not understand the investment
style and risks attached with the nfo.
The nfo mutual fund is not aligned with
your risk profile.
Summary
Multi asset mutual funds are more
diversified than other hybrid funds.
A multi asset mutual fund can be a part of
your portfolio but should never be part of your core portfolio.
The main idea behind a multi asset mutual
fund is to diversify risks and not high returns.
It is important for you as an investor to
be well aware as to what asset classes your fund is investing in since not all
multi asset mutual funds are run in one particular manner.
Although most multi asset mutual funds are
taxed as equity funds, not all are so you need to check that beforehand too.
For portfolio enquiries, email us with your doubts at info@themutualfundguide.com